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The dollar stands firm this Tuesday, holding its ground ahead of the eagerly anticipated US Consumer Price Index (CPI) figures. Traders are cautious, refraining from selling the dollar as recent adjustments by the US Administration to refine inflation metrics suggest potential underestimation of current CPI expectations.
The National Federation of Independent Business (NFIB) will release its January Index before the CPI figures around 13:30 GMT. Market watchers eagerly await both the Monthly Core and Headline inflation data, anticipating further declines. Any surprises in these figures could prompt adjustments in rate cut expectations from the US Federal Reserve.
The GBP/USD pair rose 0.3% to 1.2660 after the UK jobs report but remains rangebound between 1.2600 and 1.2800. The EUR/USD and USD/JPY pairs trade flat, with the former hovering around 1.0774 and the latter around 149.38, awaiting potential catalysts.
The focal point of market sentiment pivots towards the impending release of US CPI data, anticipated to steer trading dynamics in the sessions ahead.
In parallel markets, stocks exhibit a downward trend as traders exercise caution ahead of the pivotal event. S&P 500 futures register a 0.4% decline, down by 20 points. Meanwhile, the bond market remains subdued, with 10-year Treasury yields stagnating at 4.167%. Despite the prevailing sluggishness, expectations abound for a potential uptick post-data release, with attention directed towards the 4.20% ceiling mark.
